Canadian Securities Course (CSC) Level 2 Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

Alternative mutual funds are indeed required to be offered with a prospectus, which provides essential information for investors regarding the fund’s objectives, strategies, fees, and risks involved. However, their defining feature is that they often include investment strategies that are not typical of traditional mutual funds. The inclusion of strategies such as investing in commodities, derivatives, or leveraging makes these funds distinct, as they aim to provide diversification and potentially higher returns compared to conventional mutual funds.

Regarding the other options you mentioned, they contain constraints or criteria that do not accurately describe the general offering of alternative mutual funds. For instance, the minimum investment thresholds quoted are not standard features across all alternative mutual funds, as many funds provide access to retail investors with lower investment amounts. Similarly, exclusive access for high-net-worth investors over $5 million is too restrictive and does not reflect the broader opportunities available. Lastly, alternative mutual funds are designed to encompass a wider range of strategies beyond traditional ones, rather than being limited to them. Thus, the correct feature highlights the requirement to be offered with a prospectus, which is a fundamental aspect of all investment products to ensure investor protection and transparency.